Accountable Care Organizations

The Effect Of Physicians’ Electronic Access To Tests

There has been a pretty interesting debate about the effect of EHRs on healthcare costs as a result of the initial Health Affairs article, which described a positive (not negative) correlation between EHR use and healthcare costs.  The most recent Health Affairs article replies to a posting by the National Coordinator for Health IT, who tried to debunk the major conclusions of the Health Affairs article.  I took note of the las

Risk Assumption in the Medicare Bundled Payment Initiative

CBO Report Questions Success of Medicare Demonstration Projects

A new report (Lessons from Medicare's Demonstration Projects on Disease Management, Care Coordination, and Value-Based Payment) by the Congressional Budget Office paints a depressing picture of the cost effectiveness of many Medicare demonstration programs.  This report reviewed the outcomes of 10 major demonstrations conducted by CMS and concludes that few of them have any effect on cost and quality.  The summary of the report presents its major findings:

Preventing Readmissions - Conventional Wisdom vs. Research

Another interesting article about the causes of readmissions and their prevention is in this month’s New England Journal of Medicine.  This article (The Relationship between Hospital Admission Rates and Rehospitalizations) explores the causality for readmissions, and reports on the factors showing the highest correlation with the readmission rate.  The authors found that the primary driver of the readmission rate was the overall “all-cause admission rate”, meaning that hospitals having high admissio

CMS Modifies Risk Adjustment for ACOs

In the draft ACO regulations, CMS established a single ACO risk adjustment factor using historical data from all participants, and did not modify it throughout the participation period.  This policy reflected CMS’ concern that risk scores would increase due to changes in coding rather than actual changes in patient status, which would inappropriately lower the benchmarks and allow additional “savings” to be realized.  Therefore, the risk score of the initial group of members would be applied throughout the participation period regardless of changes in the actual

Medicare Shared Savings - The Complete Picture

CMS released notice of new ACO database - but doesn't clarify much

Recently CMS released an announcement of the creation of a database specifically designed to contain ACO-related information.  I had hoped that it would clarify the type of data that would be released to ACOs, and the timing and frequency of the release. But the immortal words of Pete Townsend prevailed, and I was fooled again. It looks like this will primarily be an internal CMS database containing patient, provider and administrative data, which will largely be used by CMS.

Comments on the PGP Demonstration from former CMS Administrator

An interesting article in the New England Journal of Medicine by former CMS administrator Gail Wilensky describes some of the complications that participating providers encountered in the Physician Group Practice demonstration project.  These included lack of data provided in a timely manner, which impeded the ability of the participants to effectively manage their populations.  The article relates the results of this demonstration project to the structure proposed by CMS for accoun

JAMA Article Highlights Needs for ACO Analytics Planning

A new article in the Journal of the American Medical Association highlights the need for careful due diligence in planning accountable care organizations.

CMS Physician Group Practice Demonstration Results

The results of the Physician Group Practice (PGP) demonstration project have recently been released and are available from CMS here. Of interest in these results is the unevenness of the results. Of the 10 participating groups, one group received 52% of all shared savings payments, while three groups failed to achieve any shared savings.

ACO Antitrust Issues Underscore the Need for Data

A recent article in Becker's Hospital review linked to this article in the Corporate Counsel newsletter about the difficulties of complying with the ACO antitrust requirements, and the potential for disqualification from participation (with

Will forming an ACO force you into other types of capitation?

As healthcare costs continue to increase, organizations that pay these costs are looking for opportunities to offload the risk of cost increases on to other organizations.  Many states have turned to capitation in the Medicaid programs, moving their utilization and price risk onto the Medicaid HMOs that participate in their programs.  In Massachusetts, insurance companies whose rates are forced down by state regulators are apparently also considering use of capitation to reduce a rate of increase of their costs.

Recommended Healthcare Reading

A recent poisting on the Better Health blog recommends four books to better understanding the US healthcare system:

Risk Adjustments for Individuals and Groups

A new report was recently released by CMS that measures the accuracy of the risk adjustment models that CMS utilizes for Medicare Advantage plans, the Physician Group Practice demonstration and others, and is expected to be used for Accountable Care Organizations (ACOs). This report provides some interesting insights into the effectiveness of risk adjusters.

Data Integration in ACOs

The Healthcare IT Guy's recent blog about the analytical systems that ACOs will require does an excellent job of framing the issue of the IT needs of ACOs and other similar organizations.  We would like to highlight several points from this article.

First, these systems will require data integration capabilities of a type not typically seen in hospitals.  Hospital systems typically integrate data though the HL7 stan

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